Gold premiums in Turkey have been soaring recently, and the main driver behind this surge is the country’s persistent inflationary pressures. When inflation runs high, people naturally look for ways to protect their savings from losing value—and gold has long been a trusted refuge in such times. But why exactly are gold premiums spiking now, and what does it mean for everyday Turks? Let’s unpack this.
First off, Turkey has been grappling with very high inflation rates. Core consumer prices jumped over 35% year-on-year as of mid-2025, following an even more intense peak last year when inflation hit above 75%. This kind of rapid price increase erodes the purchasing power of the Turkish lira at a dizzying pace. As a result, many Turks find their money shrinking if kept in cash or traditional bank accounts.
This economic backdrop fuels demand for physical gold—especially bars and coins—as a way to preserve wealth. Unlike paper currency that can lose value quickly during inflationary periods, gold holds intrinsic value globally and historically acts as a hedge against currency depreciation. In Turkey’s case, households have increasingly turned to buying physical gold rather than relying on formal financial products or just holding onto lira notes.
Interestingly, this trend isn’t just about investment; it’s also cultural. Turks traditionally cherish gold jewelry not only as adornment but also as portable savings passed down through generations. However, recent years show that while jewelry demand remains strong—particularly during times like late 2023 when people sought tangible hedges—the preference has shifted noticeably towards bullion (bars) and coins because they offer clearer investment security amid economic uncertainty.
Now here’s where premiums come into play: The premium is essentially the extra cost paid over the international spot price of gold when buying locally in Turkey. Due to skyrocketing local demand combined with supply constraints—like import restrictions or delays—these premiums have ballooned significantly compared to global prices.
Moreover, geopolitical tensions worldwide add another layer of complexity by pushing global gold prices higher overall; for example, geopolitical unrest in regions like the Middle East has driven up international prices by around 45% compared to last year. Since Turkish buyers must pay these elevated global rates plus local markups due to supply-demand imbalances and currency weakness against foreign currencies like USD or EUR—the total cost ends up quite steep domestically.
Central banks’ behavior also influences market dynamics here: The Central Bank of Turkey itself has been actively purchasing significant amounts of physical gold recently alongside other nations aiming to diversify reserves away from volatile currencies toward safer assets amid ongoing instability globally.
For ordinary citizens who keep “gold under their pillows,” so to speak—that is literally storing bars or coins at home—the rising premium means they face paying more upfront but gain protection against further erosion from inflation down the road. It reflects both anxiety about future economic conditions and trust in tangible assets over paper money whose value seems increasingly uncertain day-to-day.
In essence:
– **High local inflation** drives Turks toward physical gold as protection.
– **Demand outpaces supply**, causing sharp increases in **gold premiums** within Turkey.
– Global factors like geopolitical unrest push international prices higher too.
– Cultural habits reinforce preference for both jewelry (wearable savings) and bullion (investment-grade).
– Central bank purchases signal official confidence in maintaining large reserves amid volatility.
All these elements combine into an environment where owning physical gold feels less like luxury jewelry acquisition and more like essential financial insurance—a lifeline against unpredictable economic storms sweeping through Turkey today.